- GAAP LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS OF $(0.13) -
- DISTRIBUTABLE LOSS PER COMMON SHARE OF $(0.94) -
- DISTRIBUTABLE LOSS PER COMMON SHARE BEFORE REALIZED LOSSES OF $(0.04) -
NEW YORK, Nov. 06, 2025 (GLOBE NEWSWIRE) -- Ready Capital Corporation (“Ready Capital” or the “Company”) (NYSE: RC), a multi-strategy real estate finance company that originates, acquires, finances, and services lower-to-middle-market (“LMM”) investor and owner-occupied commercial real estate loans, today reported financial results for the quarter ended September 30, 2025.
“Our primary focus continues to be restoring financial health,” said Thomas Capasse, Ready Capital’s Chairman and Chief Executive Officer. “Through our decisive exit strategies for our underperforming loan and real estate exposure and risk management of our upcoming debt maturities, we believe we are on the path to balance sheet stability and profitability.”
Third Quarter Highlights
LMM commercial real estate originations of $139 million
Small Business Lending (“SBL”) loan originations of $283 million, including $173 million of Small Business Administration 7(a) loans and $67 million of United States Department of Agriculture loans
Completed two portfolio sales consisting of 217 loans with an unpaid principal balance of $758 million for net proceeds of $109 million
Secured ownership and control of the Portland OR, mixed-use asset via a consensual deed-in-lieu arrangement
Book value of $10.28 per share of common stock as of September 30, 2025
Acquired approximately 2.5 million shares of the Company’s common stock at an average price of $4.17 per share as part of stock repurchase program
Use of Non-GAAP Financial Information
In addition to the results presented in accordance with U.S. GAAP, this press release includes distributable earnings, formerly referred to as core earnings, which is a non-U.S. GAAP financial measure. The Company defines distributable earnings as net income adjusted for unrealized gains and losses related to certain mortgage backed securities (“MBS”) not retained by us as part of our loan origination business, realized gains and losses on sales of certain MBS, unrealized changes in our current expected credit loss reserve and valuation allowance, unrealized gains or losses on de-designated cash flow hedges, unrealized gains or losses on foreign exchange hedges, unrealized gains or losses on certain unconsolidated joint ventures, non-cash compensation expense related to our stock-based incentive plan, unrealized gains or losses on preferred equity, at fair value, unrealized gain or losses or other non-cash items related to real estate owned and one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains, or merger related expenses.
The Company believes that this non-U.S. GAAP financial information, in addition to the related U.S. GAAP measures, provides investors greater transparency into the information used by management in its financial and operational decision-making, including the determination of dividends. However, because distributable earnings is an incomplete measure of the Company's financial performance and involves differences from net income computed in accordance with U.S. GAAP, it should be considered along with, but not as an alternative to, the Company's net income computed in accordance with U.S. GAAP as a measure of the Company's financial performance. In addition, because not all companies use identical calculations, the Company's presentation of distributable earnings may not be comparable to other similarly-titled measures of other companies.
In calculating distributable earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude unrealized gains and losses on MBS acquired by the Company in the secondary market but is not adjusted to exclude unrealized gains and losses on MBS retained by Ready Capital as part of its loan origination businesses, where the Company transfers originated loans into an MBS securitization and the Company retains an interest in the securitization. In calculating distributable earnings, the Company does not adjust Net Income (in accordance with U.S. GAAP) to take into account unrealized gains and losses on MBS retained by us as part of the loan origination businesses because the unrealized gains and losses that are generated in the loan origination and securitization process are considered to be a fundamental part of this business and an indicator of the ongoing performance and credit quality of the Company’s historical loan originations. In calculating distributable earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude realized gains and losses on certain MBS securities considered to be non-distributable. Certain MBS positions are considered to be non-distributable due to a variety of reasons which may include collateral type, duration, and size.
Servicing rights relating to the Company’s small business commercial business are accounted for under ASC 860, Transfer and Servicing. In calculating distributable earnings, the Company does not exclude realized gains or losses on commercial MSRs, as servicing income is a fundamental part of Ready Capital’s business and is an indicator of the ongoing performance.
To qualify as a REIT, the Company must distribute to its stockholders each calendar year at least 90% of its REIT taxable income (including certain items of non-cash income), determined without regard to the deduction for dividends paid and excluding net capital gain. There are certain items, including net income generated from the creation of MSRs, that are included in distributable earnings but are not included in the calculation of the current year’s taxable income. These differences may result in certain items that are recognized in the current period’s calculation of distributable earnings not being included in taxable income, and thus not subject to the REIT dividend distribution requirement until future years.
The table below reconciles Net Income computed in accordance with U.S. GAAP to Distributable Earnings.
(in thousands) | Three Months Ended | ||
Net Loss | $ | (16,737 | ) |
Reconciling items: | |||
Unrealized gain on joint ventures | (4,336 | ) | |
Increase in CECL reserve | 32,844 | ||
Decrease in valuation allowance | (178,225 | ) | |
Non-recurring REO impairment | 1,862 | ||
Non-cash compensation | 1,591 | ||
Unrealized gain on preferred equity, at fair value | (1,949 | ) | |
Merger transaction costs and other non-recurring expenses | 2,220 | ||
Bargain purchase gain | (24,472 | ) | |
Depreciation and amortization on real estate owned | 1,100 | ||
Realized losses on sale of investments | 188,512 | ||
Total reconciling items | $ | 19,147 | |
Income tax adjustments | (4,580 | ) | |
Distributable loss before realized losses | $ | (2,170 | ) |
Realized losses on sale of investments, net of tax | (147,422 | ) | |
Distributable loss | $ | (149,592 | ) |
Less: Distributable earnings attributable to non-controlling interests | 1,473 | ||
Less: Income attributable to participating shares | 2,210 | ||
Distributable loss attributable to common stockholders | $ | (153,275 | ) |
Distributable loss before realized losses on investments, net of tax per common share - basic and diluted | $ | (0.04 | ) |
Distributable loss per common share - basic and diluted | $ | (0.94 | ) |
U.S. GAAP return on equity is based on U.S. GAAP net income, while distributable return on equity is based on distributable earnings, which adjusts U.S. GAAP net income for the items in the distributable earnings reconciliation above.
Webcast and Earnings Conference Call
Management will host a webcast and conference call on Friday, November 6, 2025 at 8:30am ET to provide a general business update and discuss the financial results for the quarter ended September 30, 2025. During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.
The Company encourages use of the webcast due to potential extended wait times to access the conference call via dial-in. The webcast of the conference call will be available in the Investor Relations section of the Company’s website at www.readycapital.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.
To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
Domestic: 1-877-407-0792
International: 1-201-689-8263
Conference Call Playback:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Replay Pin #: 13753254
The playback can be accessed through November 21, 2025.
Safe Harbor Statement
This press release contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, applicable regulatory changes; general volatility of the capital markets; changes in the Company’s investment objectives and business strategy; the availability of financing on acceptable terms or at all; the availability, terms and deployment of capital; the availability of suitable investment opportunities; changes in the interest rates or the general economy; increased rates of default and/or decreased recovery rates on investments; changes in interest rates, interest rate spreads, the yield curve or prepayment rates; changes in prepayments of Company’s assets; the degree and nature of competition, including competition for the Company's target assets; and other factors, including those set forth in the Risk Factors section of the Company's most recent Annual Report on Form 10-K filed with the SEC, and other reports filed by the Company with the SEC, copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
About Ready Capital Corporation
Ready Capital Corporation (NYSE: RC) is a multi-strategy real estate finance company that originates, acquires, finances and services lower-to-middle-market investor and owner occupied commercial real estate loans. The Company specializes in loans backed by commercial real estate, including agency multifamily, investor, construction, and bridge as well as U.S. Small Business Administration loans under its Section 7(a) program and government guaranteed loans focused on the United States Department of Agriculture. Headquartered in New York, New York, the Company employs approximately 500 professionals nationwide.
Contact
Investor Relations
Ready Capital Corporation
212-257-4666
InvestorRelations@readycapital.com
Additional information can be found on the Company’s website at www.readycapital.com.
READY CAPITAL CORPORATION | |||||||
(in thousands) | September 30, 2025 | December 31, 2024 | |||||
Assets | |||||||
Cash and cash equivalents | $ | 147,505 | $ | 143,803 | |||
Restricted cash | 44,491 | 30,560 | |||||
Loans, net (including $1,088 and $3,533 held at fair value) | 4,360,501 | 3,378,149 | |||||
Loans, held for sale (including $143,819 and $128,531 held at fair value and net of valuation allowance of $53,937 and $97,620) | 163,792 | 241,626 | |||||
Mortgage-backed securities | 33,105 | 31,006 | |||||
Investment in unconsolidated joint ventures (including $5,952 and $6,577 held at fair value) | 178,840 | 161,561 | |||||
Derivative instruments | 5,295 | 7,963 | |||||
Servicing rights | 126,966 | 128,440 | |||||
Real estate owned | 632,985 | 193,437 | |||||
Other assets | 472,516 | 362,486 | |||||
Assets of consolidated VIEs | 2,166,105 | 5,175,295 | |||||
Assets held for sale | — | 287,595 | |||||
Total Assets | $ | 8,332,101 | $ | 10,141,921 | |||
Liabilities | |||||||
Secured borrowings | 2,879,172 | 2,035,176 | |||||
Securitized debt obligations of consolidated VIEs, net | 1,293,778 | 3,580,513 | |||||
Senior secured notes, net | 721,151 | 437,847 | |||||
Corporate debt, net | 666,624 | 895,265 | |||||
Guaranteed loan financing | 565,883 | 691,118 | |||||
Contingent consideration | 18,385 | 573 | |||||
Derivative instruments | 1,627 | 352 | |||||
Dividends payable | 22,602 | 43,168 | |||||
Loan participations sold | 102,987 | 95,578 | |||||
Due to third parties | 9,927 | 1,442 | |||||
Accounts payable and other accrued liabilities | 166,406 | 188,051 | |||||
Liabilities held for sale | — | 228,735 | |||||
Total Liabilities | $ | 6,448,542 | $ | 8,197,818 | |||
Preferred stock Series C, liquidation preference $25.00 per share | 8,361 | 8,361 | |||||
Commitments & contingencies | |||||||
Stockholders’ Equity | |||||||
Preferred stock Series E, liquidation preference $25.00 per share | 111,378 | 111,378 | |||||
Common stock, $0.0001 par value, 500,000,000 shares authorized, 161,834,837 and 162,792,372 shares issued and outstanding, respectively | 17 | 17 | |||||
Additional paid-in capital | 2,257,078 | 2,250,291 | |||||
Retained earnings (deficit) | (569,709 | ) | (505,089 | ) | |||
Accumulated other comprehensive loss | (24,096 | ) | (18,552 | ) | |||
Total Ready Capital Corporation equity | 1,774,668 | 1,838,045 | |||||
Non-controlling interests | 100,530 | 97,697 | |||||
Total Stockholders’ Equity | $ | 1,875,198 | $ | 1,935,742 | |||
Total Liabilities, Redeemable Preferred Stock, and Stockholders’ Equity | $ | 8,332,101 | $ | 10,141,921 | |||
READY CAPITAL CORPORATION | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands, except share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||
Interest income | $ | 137,491 | $ | 226,537 | $ | 445,193 | $ | 693,010 | |||||||
Interest expense | (126,971 | ) | (175,572 | ) | (403,274 | ) | (542,544 | ) | |||||||
Net interest income before (provision for) recovery of loan losses | $ | 10,520 | $ | 50,965 | $ | 41,919 | $ | 150,466 | |||||||
(Provision for) recovery of loan losses | (37,977 | ) | (53,166 | ) | 62,951 | (7,751 | ) | ||||||||
Net interest income after (provision for) recovery of loan losses | $ | (27,457 | ) | $ | (2,201 | ) | $ | 104,870 | $ | 142,715 | |||||
Non-interest income | |||||||||||||||
Net realized gain (loss) on financial instruments and real estate owned | (160,396 | ) | (69,184 | ) | (131,513 | ) | (43,066 | ) | |||||||
Net unrealized gain (loss) on financial instruments | 2,914 | (1,241 | ) | (450 | ) | 2,034 | |||||||||
Valuation recovery (allowance), loans held for sale | 178,225 | 71,060 | 38,761 | (156,107 | ) | ||||||||||
Servicing income, net of amortization and impairment of $4,514 and $22,682 for the three and nine months ended September 30, 2025, and $5,841 and $14,216 for the three and nine months ended September 30, 2024, respectively | 7,509 | 5,415 | 13,661 | 12,444 | |||||||||||
Gain on bargain purchase | 24,472 | 32,165 | 112,562 | 13,859 | |||||||||||
Income (loss) on unconsolidated joint ventures | 7,417 | 3,214 | 3,291 | 4,821 | |||||||||||
Other income | 14,773 | 14,823 | 37,667 | 37,246 | |||||||||||
Total non-interest income (expense) | $ | 74,914 | $ | 56,252 | $ | 73,979 | $ | (128,769 | ) | ||||||
Non-interest expense | |||||||||||||||
Employee compensation and benefits | (21,151 | ) | (22,989 | ) | (65,564 | ) | (59,202 | ) | |||||||
Allocated employee compensation and benefits from related party | (3,602 | ) | (2,537 | ) | (10,478 | ) | (8,037 | ) | |||||||
Professional fees | (6,008 | ) | (6,232 | ) | (17,864 | ) | (19,330 | ) | |||||||
Management fees – related party | (5,156 | ) | (6,498 | ) | (15,805 | ) | (19,344 | ) | |||||||
Loan servicing expense | (9,771 | ) | (10,101 | ) | (36,653 | ) | (33,907 | ) | |||||||
Transaction related expenses | (1,910 | ) | (2,998 | ) | (5,243 | ) | (5,240 | ) | |||||||
Impairment on real estate | (1,862 | ) | (525 | ) | (8,476 | ) | (26,627 | ) | |||||||
Other operating expenses | (24,879 | ) | (18,048 | ) | (57,135 | ) | (43,935 | ) | |||||||
Total non-interest expense | $ | (74,339 | ) | $ | (69,928 | ) | $ | (217,218 | ) | $ | (215,622 | ) | |||
Loss from continuing operations before benefit for income taxes | (26,882 | ) | (15,877 | ) | (38,369 | ) | (201,676 | ) | |||||||
Income tax benefit | 9,935 | 8,404 | 55,081 | 87,194 | |||||||||||
Net income (loss) from continuing operations | $ | (16,947 | ) | $ | (7,473 | ) | $ | 16,712 | $ | (114,482 | ) | ||||
Discontinued operations | |||||||||||||||
Income (loss) from discontinued operations before benefit (provision) for income taxes | 280 | 258 | (6,881 | ) | (1,554 | ) | |||||||||
Income tax benefit (provision) | (70 | ) | (64 | ) | 1,720 | 389 | |||||||||
Net income (loss) from discontinued operations | $ | 210 | $ | 194 | $ | (5,161 | ) | $ | (1,165 | ) | |||||
Net income (loss) | $ | (16,737 | ) | $ | (7,279 | ) | $ | 11,551 | $ | (115,647 | ) | ||||
Less: Dividends on preferred stock | 1,999 | 1,999 | 5,997 | 5,997 | |||||||||||
Less: Net income attributable to non-controlling interest | 2,008 | 2,031 | 6,282 | 3,968 | |||||||||||
Net loss attributable to Ready Capital Corporation | $ | (20,744 | ) | $ | (11,309 | ) | $ | (728 | ) | $ | (125,612 | ) | |||
Earnings per common share from continuing operations - basic | $ | (0.13 | ) | $ | (0.07 | ) | $ | 0.02 | $ | (0.74 | ) | ||||
Earnings per common share from discontinued operations - basic | $ | 0.00 | $ | 0.00 | $ | (0.03 | ) | $ | (0.01 | ) | |||||
Total earnings per common share - basic | $ | (0.13 | ) | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.75 | ) | |||
Earnings per common share from continuing operations - diluted | $ | (0.13 | ) | $ | (0.07 | ) | $ | 0.02 | $ | (0.74 | ) | ||||
Earnings per common share from discontinued operations - diluted | $ | 0.00 | $ | 0.00 | $ | (0.03 | ) | $ | (0.01 | ) | |||||
Total earnings per common share - diluted | $ | (0.13 | ) | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.75 | ) | |||
Weighted-average shares outstanding | |||||||||||||||
Basic | 163,574,703 | 168,335,483 | 165,491,135 | 169,669,145 | |||||||||||
Diluted | 165,873,807 | 169,509,208 | 167,790,240 | 170,815,080 | |||||||||||
Dividends declared per share of common stock | $ | 0.125 | $ | 0.25 | $ | 0.375 | $ | 0.85 | |||||||
READY CAPITAL CORPORATION | |||||||||||||||
Three Months Ended September 30, 2025 | |||||||||||||||
(in thousands) | LMM Commercial Real Estate | Small Business Lending | Corporate-Other | Consolidated | |||||||||||
Interest income | $ | 105,856 | $ | 31,635 | $ | — | $ | 137,491 | |||||||
Interest expense | (106,556 | ) | (20,415 | ) | — | (126,971 | ) | ||||||||
Net interest income before provision for loan losses | $ | (700 | ) | $ | 11,220 | $ | — | $ | 10,520 | ||||||
Provision for loan losses | (30,980 | ) | (6,997 | ) | — | (37,977 | ) | ||||||||
Net interest income after provision for loan losses | $ | (31,680 | ) | $ | 4,223 | $ | — | $ | (27,457 | ) | |||||
Non-interest income | |||||||||||||||
Net realized gain (loss) on financial instruments and real estate owned | (179,279 | ) | 18,883 | — | (160,396 | ) | |||||||||
Net unrealized gain (loss) on financial instruments | 2,279 | 845 | (210 | ) | 2,914 | ||||||||||
Valuation (allowance) recovery, loans held for sale | 178,225 | — | — | 178,225 | |||||||||||
Servicing income, net | 1,155 | 6,354 | — | 7,509 | |||||||||||
Gain on bargain purchase | — | — | 24,472 | 24,472 | |||||||||||
Income on unconsolidated joint ventures | 7,410 | 7 | — | 7,417 | |||||||||||
Other income | 7,238 | 6,475 | 1,060 | 14,773 | |||||||||||
Total non-interest income | $ | 17,028 | $ | 32,564 | $ | 25,322 | $ | 74,914 | |||||||
Non-interest expense | |||||||||||||||
Employee compensation and benefits | (5,023 | ) | (13,939 | ) | (2,189 | ) | (21,151 | ) | |||||||
Allocated employee compensation and benefits from related party | (360 | ) | — | (3,242 | ) | (3,602 | ) | ||||||||
Professional fees | (790 | ) | (3,255 | ) | (1,963 | ) | (6,008 | ) | |||||||
Management fees – related party | — | — | (5,156 | ) | (5,156 | ) | |||||||||
Loan servicing expense | (8,081 | ) | (1,690 | ) | — | (9,771 | ) | ||||||||
Transaction related expenses | — | — | (1,910 | ) | (1,910 | ) | |||||||||
Impairment on real estate | (1,862 | ) | — | — | (1,862 | ) | |||||||||
Other operating expenses | (13,022 | ) | (9,479 | ) | (2,378 | ) | (24,879 | ) | |||||||
Total non-interest expense | $ | (29,138 | ) | $ | (28,363 | ) | $ | (16,838 | ) | $ | (74,339 | ) | |||
Income (loss) before provision for income taxes | $ | (43,790 | ) | $ | 8,424 | $ | 8,484 | $ | (26,882 | ) | |||||
Total assets | $ | 6,436,175 | $ | 1,493,159 | $ | 402,767 | $ | 8,332,101 | |||||||
READY CAPITAL CORPORATION | |||||||||||||||
Nine Months Ended September 30, 2025 | |||||||||||||||
(in thousands) | LMM Commercial Real Estate | Small Business Lending | Corporate-Other | Consolidated | |||||||||||
Interest income | $ | 353,097 | $ | 92,096 | $ | — | $ | 445,193 | |||||||
Interest expense | (342,998 | ) | (60,276 | ) | — | (403,274 | ) | ||||||||
Net interest income before recovery of (provision for) loan losses | $ | 10,099 | $ | 31,820 | $ | — | $ | 41,919 | |||||||
Recovery of (provision for) loan losses | 81,815 | (18,864 | ) | — | 62,951 | ||||||||||
Net interest income after recovery of (provision for) loan losses | $ | 91,914 | $ | 12,956 | $ | — | $ | 104,870 | |||||||
Non-interest income | |||||||||||||||
Net realized gain (loss) on financial instruments and real estate owned | (191,113 | ) | 59,600 | — | (131,513 | ) | |||||||||
Net unrealized gain (loss) on financial instruments | (2,453 | ) | 3,079 | (1,076 | ) | (450 | ) | ||||||||
Valuation (allowance) recovery, loans held for sale | 38,761 | — | — | 38,761 | |||||||||||
Servicing income, net | 4,501 | 9,160 | — | 13,661 | |||||||||||
Gain on bargain purchase | — | — | 112,562 | 112,562 | |||||||||||
Income (loss) on unconsolidated joint ventures | 3,250 | 41 | — | 3,291 | |||||||||||
Other income | 13,050 | 21,259 | 3,358 | 37,667 | |||||||||||
Total non-interest income (loss) | $ | (134,004 | ) | $ | 93,139 | $ | 114,844 | $ | 73,979 | ||||||
Non-interest expense | |||||||||||||||
Employee compensation and benefits | (17,373 | ) | (43,678 | ) | (4,513 | ) | (65,564 | ) | |||||||
Allocated employee compensation and benefits from related party | (1,048 | ) | — | (9,430 | ) | (10,478 | ) | ||||||||
Professional fees | (2,537 | ) | (9,451 | ) | (5,876 | ) | (17,864 | ) | |||||||
Management fees – related party | — | — | (15,805 | ) | (15,805 | ) | |||||||||
Loan servicing expense | (34,158 | ) | (2,495 | ) | — | (36,653 | ) | ||||||||
Transaction related expenses | — | — | (5,243 | ) | (5,243 | ) | |||||||||
Impairment on real estate | (8,476 | ) | — | — | (8,476 | ) | |||||||||
Other operating expenses | (20,830 | ) | (30,522 | ) | (5,783 | ) | (57,135 | ) | |||||||
Total non-interest expense | $ | (84,422 | ) | $ | (86,146 | ) | $ | (46,650 | ) | $ | (217,218 | ) | |||
Income (loss) before provision for income taxes | $ | (126,512 | ) | $ | 19,949 | $ | 68,194 | $ | (38,369 | ) | |||||
Total assets | $ | 6,436,175 | $ | 1,493,159 | $ | 402,767 | $ | 8,332,101 | |||||||